One Big Beautiful Bill Act and Financial Aid

Student and Parent Loan Changes

Parent PLUS Loan

All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student.

Legacy Provision: If a borrower has a Federal Direct Loan made before July 1, 2026, while the dependent student is enrolled in a credentialed program, the parent can continue to borrow under current loan limits for 3 academic years or the remainder of their dependent student’s expected time to credential, whichever is less, however the student must remain enrolled in the current degree type. 

Undergraduate Direct Student Loans

Borrowers of the undergraduate subsidized and unsubsidized loans will not see any changes to eligibility or lifetime loan limits under the OBBBA. 

Annual Loan Limits for Part-Time Students

Beginning in 2026-2027, the OBBBA reduces the amount of a loan that a student may borrow for an academic year if the student is enrolled in a program of study on less than a full-time basis during that academic year. This reduction in the annual loan limit will be made in direct proportion to the degree to which the student is not enrolled full-time, rounded to the nearest percentage point. 

New Graduate Loan Limits

Starting July 1, 2026:

• Graduate students who are new borrowers may borrow up to $20,500 per year, with a lifetime limit of $100,000.  
• Professional students (e.g., law and PharmD) may borrow up $50,000 per year in Unsubsidized Loans, with a lifetime limit of $200,000.
• If you have borrowed an Unsubsidized Loan in your current program of study, you will continue to qualify for the existing Unsubsidized Loan limits along with the Grad PLUS loan as long as you remain enrolled in that program of study. If you have also borrowed a Grad PLUS loan in your current or existing program you may continue borrowing for an additional three years or the end of your program or whichever comes first.  

If you’re starting a new Graduate program before July 1, 2026, you may be eligible for the Grad PLUS under the current rules.

Grad PLUS Loan

Important news for graduate student borrowers. Certain provisions of the law must still be clarified. The information below is what is interpreted of the changes as of today. Currently, there are no changes to the 2025-2026 academic year.  

Grad PLUS Loans Are Being Phased Out  

• Starting July 1, 2026, new borrowers will no longer be eligible for the Federal Direct Grad PLUS Loan.  
• Exception: If you are enrolled in a current program and have borrowed a Direct Loan before July 1, 2026, you will still be able to access a Grad PLUS loan for up to three additional years or until your program ends (whichever comes first) . This legacy provision only applies to loans borrowed for your current program. If you have borrowed a Grad PLUS for a previous program and start a new one after July 1, 2026, you will not be eligible for the loan in your new program.

FAFSA Form & Pell Eligibility Changes

Full Cost of Attendance (COA) Scholarships/Grants

Effective July 1, 2026, students who receive grants or scholarships from non-federal sources covering their entire cost of attendance (COA) are ineligible to receive a Federal Pell Grant, even if otherwise eligible for the program. 

Foreign Income and Pell Eligibility

Beginning with the 2026-2027 award year, the foreign earned income exclusion amount reported on the FAFSA form will be added to the adjusted gross income (AGI) when determining Federal Pell Grant eligibility. 

Students with High SAIs

Beginning with the 2026-2027 award year, an applicant with a Student Aid Index (SAI) equal to or greater than twice the maximum Federal Pell Grant award amount for the award year is ineligible for a Federal Pell Grant. 

For the 2026–2027 award year, this threshold is $14,790. 

This limit does not apply to students who qualify for a Federal Pell Grant under the Special Rule (dependents of certain deceased service members and Public Safety Officers).